0000010456 2008-01-01 2008-12-31 0000010456 2007-12-31 0000010456 2008-06-30 0000010456 2009-07-23 0000010456 2009-06-30 0000010456 2008-12-31 0000010456 2009-04-01 2009-06-30 0000010456 2008-04-01 2008-06-30 0000010456 2008-01-01 2008-06-30 0000010456 2009-01-01 2009-06-30 xbrli:shares iso4217:USD <div> <a name="_AUC125aa2328adc417899a0d107107d9c2a">Net interest expense</a>   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.24%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="43%" nowrap="nowrap" valign="bottom" style= "width:43.94%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.26%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="24%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:24.0%;border: none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Three months ended </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.98%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.58%; border:none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Six months ended </td> </tr> <tr style="mso-yfti-irow:1;height:12.0pt"> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.24%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="43%" nowrap="nowrap" valign="bottom" style= "width:43.94%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.26%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="24%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:24.0%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.98%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.58%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> </tr> <tr style="mso-yfti-irow:2;height:12.0pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.2%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (in millions) </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.26%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.12%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.1%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.98%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.12%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.2%;padding: 0in 5.4pt 0in 5.4pt;height:12.75pt"> Interest expense, net of capitalized interest </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.26%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.12%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $29 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.1%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $39 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.98%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.12%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $60 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $76 </td> </tr> <tr style="mso-yfti-irow:4;height:12.95pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.2%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Interest income </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.26%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.12%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">           (5) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.1%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">           (14) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.98%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.12%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">           (10) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">           (34) </td> </tr> <tr style= "mso-yfti-irow:5;mso-yfti-lastrow:yes;height:13.5pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.2%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Net interest expense </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.26%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.12%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $24 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.1%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $25 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.98%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.12%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $50 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.68%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $42 </td> </tr> </table> <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} /*]]>*/ </style> </div> <div> <h6> <a name="_AUC99d87e311f6748e5b1a9db233c4d45c6"> Other charges</a> </h6>   The COLLEAGUE and SYNDEO infusion pump and heparin charges discussed below were classified in cost of sales in the company’s consolidated statements of income, and were included in the Medication Delivery segment’s pre-tax income.    With respect to COLLEAGUE, the company remains in active dialogue with the U.S. Food and Drug Administration (FDA) about various matters, including the company’s remediation plan and reviews of the company’s facilities, processes and quality controls by the company’s outside expert pursuant to the requirements of the company’s Consent Decree.  The outcome of these discussions with the FDA is uncertain and may impact the nature and timing of the company’s actions and decisions with respect to the COLLEAGUE pump.  The company’s estimates of the costs related to these matters are based on the current remediation plan and information currently available.  It is possible that additional charges related to COLLEAGUE may be required in future periods, based on new information, changes in estimates, and modifications to the current remediation plan as a result of ongoing dialogue with the FDA.   While the company continues to work to resolve the issues associated with COLLEAGUE infusion pumps and its heparin products described below, there can be no assurance that additional costs or civil and criminal penalties will not be incurred, that additional regulatory actions with respect to the company will not occur, that the company will not face civil claims for damages from purchasers or users, that substantial additional charges or significant asset impairments may not be required, that sales of any other product may not be adversely affected, or that additional legislation or regulation will not be introduced that may adversely affect the company’s operations and consolidated financial statements.   COLLEAGUE and SYNDEO Infusion Pumps The company began to hold shipments of COLLEAGUE infusion pumps in July 2005 and continues to hold shipments of new pumps in the United States.  Refer to Note 5 to the company’s consolidated financial statements in the 2008 Annual Report for further information on COLLEAGUE and SYNDEO infusion pumps.    In 2008, the company recorded charges totaling $125 million ($53 million in the first quarter and $72 million in the third quarter) related to issues associated with its COLLEAGUE infusion pumps.  From 2005 through 2007, the company recorded charges and other costs totaling $185 million related to its COLLEAGUE and SYNDEO infusion pumps.  In aggregate, these charges included $256 million of cash costs and $54 million principally related to asset impairments.  The reserves for cash costs related to customer accommodations, estimated expenditures for the materials, labor and freight costs expected to be incurred to remediate the design issues, additional warranty and other commitments made to customers.   The following table summarizes cash activity in the company’s COLLEAGUE and SYNDEO infusion pump reserves through June 30, 2009.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.72%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (in millions) </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.0%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> </tr> <tr style="mso-yfti-irow:1;height:12.75pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.72%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Charges in 2005 through 2008 </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.0%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $256 </td> </tr> <tr style="mso-yfti-irow:2;height:12.75pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.72%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Utilization in 2005 through 2008 </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.0%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">         (141) </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.72%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Reserves at December 31, 2008 </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.0%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">           115 </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.72%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Utilization </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.0%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> (16)  </td> </tr> <tr style= "mso-yfti-irow:5;mso-yfti-lastrow:yes;height:13.5pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.72%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Reserves at June 30, 2009 </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.0%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.68%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $99 </td> </tr> </table>   The remaining infusion pump reserves are expected to be substantially utilized by 2010.   Heparin In the first quarter of 2008, the company recorded a charge of $19 million related to the company’s recall of its heparin sodium injection products in the United States.  During the first quarter of 2008, the company identified an increasing level of allergic-type and hypotensive adverse reactions occurring in patients using its heparin sodium injection products in the United States and initiated a field corrective action with respect to these products.  The charge principally related to asset impairments.  The reserve established for cash costs has been substantially utilized. <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; 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<div> <a name="_AUC2401d766070140da81763488d27edc16">Acquisitions of and investments in businesses and technologies</a>   SIGMA In April 2009, the company entered an exclusive three-year distribution agreement with SIGMA covering the United States and international markets.  The agreement, which enables Baxter to immediately provide SIGMA’s Spectrum large volume infusion pumps to customers, as well as future products under development, complements Baxter’s infusion systems portfolio and next generation technologies.  The arrangement also included a 40 percent equity stake in SIGMA, and an option to purchase the remaining equity of SIGMA, exercisable at any time over a three-year term.  Baxter paid $100 million up-front and may make additional payments of up to $130 million for the exercise of the purchase option as well as for SIGMA’s achievement of specified regulatory and commercial milestones.    Because Baxter’s option to purchase the remaining equity of SIGMA limits the ability of the existing equity holders to participate significantly in SIGMA’s profits and losses, and because the existing equity holders have the ability to make decisions about SIGMA’s activities that have a significant effect on SIGMA’s success, the company concluded that SIGMA is a VIE.  Baxter is the primary beneficiary of the VIE due to its exposure to the majority of SIGMA’s expected losses or expected residual returns and the relationship between Baxter and SIGMA created by the exclusive distribution agreement, and the significance of that agreement.  Accordingly, the company consolidated the financial statements of SIGMA beginning in April 2009 (the acquisition date), with the fair value of the equity owned by the existing SIGMA equity holders reported as noncontrolling interests.  The creditors of SIGMA do not have recourse to the general credit of Baxter.   The following table summarizes the preliminary allocation of fair value related to the arrangement at the acquisition date.                 <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.54%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (in millions) </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.56%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> </td> </tr> <tr style="mso-yfti-irow:1;height:12.75pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.54%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Assets </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.56%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> </tr> <tr style="mso-yfti-irow:2;height:12.75pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.54%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Goodwill </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.56%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $87 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.54%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> IPR&D </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.56%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 24 </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.54%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Other intangible assets </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.56%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 94 </td> </tr> <tr style="mso-yfti-irow:5;height:12.75pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.54%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Purchase option (other long-term assets) </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.56%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 111 </td> </tr> <tr style="mso-yfti-irow:6;height:12.75pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.54%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Other assets </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.56%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 30 </td> </tr> <tr style="mso-yfti-irow:7;height:.1in"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.54%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.56%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> </tr> <tr style="mso-yfti-irow:8;height:12.75pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.54%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Liabilities </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.56%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> </tr> <tr style="mso-yfti-irow:9;height:12.75pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.54%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Contingent payments </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.56%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $62 </td> </tr> <tr style="mso-yfti-irow:10;height:13.5pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.54%;padding:0in 5.4pt 0in 5.4pt; height:13.5pt"> Other liabilities </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:13.5pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:13.5pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:13.5pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:13.5pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:13.5pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:13.5pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:13.5pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.56%;padding:0in 5.4pt 0in 5.4pt; height:13.5pt"> 25 </td> </tr> <tr style="mso-yfti-irow:11;height:.1in"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.54%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.56%;padding:0in 5.4pt 0in 5.4pt; height:.1in"> </td> </tr> <tr style= "mso-yfti-irow:12;mso-yfti-lastrow:yes;height:13.5pt"> <td width="46%" nowrap="nowrap" valign="bottom" style= "width:46.54%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Noncontrolling interests </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.46%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.92%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.56%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $159 </td> </tr> </table>   The amount allocated to IPR&D will be accounted for as an indefinite-lived intangible asset until regulatory approval or discontinuation.  The other intangible assets primarily relate to developed technology and will be amortized on a straight-line basis over an estimated useful life of eight years.  The fair value of the purchase option was estimated using the Black-Scholes model.  The contingent payments of up to $70 million associated with SIGMA’s achievement of specified regulatory and commercial milestones were recorded at their estimated fair value of $62 million.  Future changes in the estimated fair value of the contingent payments will be recognized immediately in earnings.  The results of operations and assets and liabilities of SIGMA are included in the Medication Delivery segment, and the goodwill is included in this reporting unit.  The goodwill is deductible for tax purposes.  The pro forma impact of the arrangement with SIGMA was not significant to the results of the company for the three and six months ended June 30, 2009 and 2008.   Edwards Lifesciences Corporation In June 2009, the company signed a definitive agreement with Edwards Lifesciences Corporation (Edwards) for the acquisition of certain assets related to Edwards’ hemofiltration product line, also known as Continuous Renal Replacement Therapy (CRRT).  CRRT mimics the function of the kidneys 24 hours a day for patients with life-threatening kidney injuries or edema (fluid overload).  The transaction is expected to close in the third quarter of 2009, pending regulatory approvals.  Under the terms of the agreement, Baxter will provide Edwards an initial cash payment of approximately $56 million upon the close of the transaction.  Additionally, Baxter will receive transition services from Edwards and is expected to pay Edwards up to an additional $9 million based on revenue objectives expected to be achieved over the next two years.  This Renal segment transaction is not expected to have a material impact on Baxter's 2009 consolidated financial statements. <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; 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<div> <a name= "_AUC791041806eb44b139c05582331ab3d46"> Collaborative arrangements</a>   On January 1, 2009, the company adopted EITF No. 07-1, which was required to be applied retrospectively to all periods presented for all collaborative arrangements existing as of the effective date.  The adoption of EITF No. 07-1 did not result in a change to the company’s historical consolidated financial statements.    In the normal course of business, Baxter enters into collaborative arrangements with third parties.  Certain of these collaborative arrangements include joint operating activities involving active participation by both partners, where both Baxter and the other entity are exposed to risks and rewards dependent on the commercial success of the activity.  These collaborative arrangements exist in all three of the company’s segments, take a number of forms and structures, principally pertain to the joint development and commercialization of new products, and are designed to enhance and expedite long-term sales and profitability growth.    The collaborative arrangements can broadly be grouped into two categories: those relating to new product development, and those relating to existing commercial products.    New Product Development Arrangements The company’s joint new product development and commercialization arrangements generally provide that Baxter license certain rights to manufacture, market or distribute a specified technology or product under development.  Baxter’s consideration for the rights generally consists of some combination of up-front payments, ongoing research and development (R&D) cost reimbursements, royalties, and contingent payments relating to the achievement of specified pre-clinical, clinical, regulatory approval or sales milestones.  Joint steering committees often exist to manage the various stages and activities of the arrangement.  Control over the R&D activities may be shared or may be performed by Baxter.  Baxter generally controls the commercialization phase, sometimes purchasing raw materials from the collaboration partner.   During the development phase, Baxter’s R&D costs are expensed as incurred.  These costs may include R&D cost reimbursements to the partner, as well as up-front and milestone payments to the partner prior to the date the product receives regulatory approval.  Milestone payments made to the partner subsequent to regulatory approval are capitalized as intangible assets and amortized to cost of sales over the useful life of the related asset.  Royalty payments are expensed as cost of sales when they become due and payable.  Any purchases of raw materials from the partner during the development stage are expensed as R&D, while such purchases during the commercialization phase are capitalized as inventory and recognized as cost of sales when the related finished products are sold.  Baxter generally records the amount invoiced to the third-party customer for the finished product as sales, as Baxter is the principal and primary obligor in the arrangement.   Payments to collaborative partners classified in cost of sales were not significant in the six months ended June 30, 2009 and 2008.  Payments to collaborative partners totaled approximately 6% of total R&D expense in both the six months ended June 30, 2009 and 2008.  The payments principally related to the development of tissue repair products, longer-acting forms of blood clotting proteins to treat hemophilia and a next-generation home hemodialysis device.    Commercial Product Arrangements The company’s commercial product collaborative arrangements generally provide for a sharing of manufacturing, marketing or distribution activities between Baxter and the partner, along with a sharing of the related profits.  The nature and split of the shared activities varies, sometimes split by type of activity and sometimes split by geographic area.    The entity that invoices the third-party customer is generally the principal and primary obligor in the arrangement and therefore records the invoiced amount as a sale.  Cost-sharing payments are generally recorded in cost of sales.  Baxter’s payments to partners under these types of arrangements totaled less than 1% of total cost of sales in both the six months ended June 30, 2009 and 2008. <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} /*]]>*/ </style> </div>

<div> <a name= "_AUC84ab0f51f79745d7a439c15dcfa85a64">6.</a>     LEGAL PROCEEDINGS   Baxter is involved in product liability, patent, commercial, and other legal proceedings that arise in the normal course of the company’s business.  The company records a liability when a loss is considered probable and the amount can be reasonably estimated.  If the reasonable estimate of a probable loss is a range, and no amount within the range is a better estimate, the minimum amount in the range is accrued.  If a loss is not probable or a probable loss cannot be reasonably estimated, no liability is recorded.   Baxter has established reserves for certain of the matters discussed below.  The company is not able to estimate the amount or range of any loss for certain of the legal contingencies for which there is no reserve or additional loss for matters already reserved.  While the liability of the company in connection with the claims cannot be estimated with any certainty and although the resolution in any reporting period of one or more of these matters could have a significant impact on the company’s results of operations for that period, the outcome of these legal proceedings is not expected to have a material adverse effect on the company’s consolidated financial position.  While the company believes that it has valid defenses in these matters, litigation is inherently uncertain, excessive verdicts do occur, and the company may in the future incur material judgments or enter into material settlements of claims.   In addition to the matters described below, the company remains subject to other potential administrative and legal actions.  With respect to regulatory matters, these actions may lead to product recalls, injunctions to halt manufacture and distribution, and other restrictions on the company’s operations and monetary sanctions.  With respect to intellectual property, the company may be exposed to significant litigation concerning the scope of the company’s and others’ rights.  Such litigation could result in a loss of patent protection or the ability to market products, which could lead to a significant loss of sales, or otherwise materially affect future results of operations.   Patent litigation   Sevoflurane Litigation In September 2005, the U.S.D.C. for the Northern District of Illinois ruled that a patent owned by Abbott Laboratories and the Central Glass Company, U.S. Patent No. 5,990,176, was not infringed by Baxter’s generic version of sevoflurane. Abbott and Central Glass appealed and Baxter filed a cross-appeal as to the validity of the patent. In November 2006, the Court of Appeals for the Federal Circuit granted Baxter’s cross-appeal and held the patent invalid. Abbott’s motions to have that appeal re-heard were denied in January 2007.   In June 2005, Baxter filed suit in the High Court of Justice in London, England seeking revocation of the U.K. part of the related European patent and a declaration of non-infringement.  In March 2007, the High Court ruled in Baxter’s favor, concluding that the U.K. portion of the European patent was invalid.  In December 2008, the Board of Appeals for the European Patent Office similarly revoked this European patent in its entirety.    In May 2005, Abbott and Central Glass filed suit in the Tokyo District Court on a counterpart Japanese patent and in September 2006, the Tokyo District Court ruled in favor of Abbott and Central Glass on this matter.  Baxter appealed this decision, and in April 2009 the appellate court reversed the District Court, lifting the injunction against Baxter’s sales of sevoflurane in Japan.    Related actions remain pending in the U.S. and Colombia. Another patent infringement action against Baxter is pending in the U.S.D.C. for the Northern District of Illinois on a second patent owned by Abbott and Central Glass. Baxter has filed a motion asserting that judgment of non-infringement and invalidity should be entered based in part on findings made in the earlier case. In 2007, Abbott brought a patent infringement action against Baxter in the Cali Circuit Court of Colombia based on a Colombian counterpart patent, and obtained an injunction preliminarily prohibiting the approval of Baxter’s generic sevoflurane in Colombia during the pendency of the infringement suit. In May 2008, the Court issued a decision maintaining the injunction, but suspending it during an appeal of the Court’s decision, which appeal is pending.   Peritoneal Dialysis Litigation On October 16, 2006, Baxter Healthcare Corporation, a direct wholly-owned subsidiary of Baxter, and DEKA Products Limited Partnership (DEKA) filed a patent infringement lawsuit against Fresenius Medical Care Holdings, Inc. and Fresenius USA, Inc.  The complaint alleges that Fresenius’ sale of the Liberty Cycler peritoneal dialysis systems and related disposable items and equipment infringes nine U.S. patents, which are owned by Baxter or exclusively licensed in the peritoneal dialysis field to Baxter from DEKA.  The case is pending in the U.S.D.C. for the Northern District of California with a trial anticipated in mid-2010.   Hemodialysis Litigation Since April 2003, Baxter has been pursuing a patent infringement action against Fresenius Medical Care Holdings, Inc. for infringement of certain Baxter patents.  The patents cover Fresenius' 2008K hemodialysis instrument.  In 2007, the court entered judgment in Baxter's favor holding the patents valid and infringed, and a jury assessed damages at $14 million for past sales only.  On April 4, 2008, the U.S.D.C. for the Northern District of California granted Baxter’s motion for permanent injunction, granted Baxter's request for royalties on Fresenius’ sales of the 2008K hemodialysis machines during a nine-month transition period before the permanent injunction took effect, and granted a royalty on disposables.  Fresenius has appealed and a decision is expected later in the year.   Other   In October 2004, a purported class action was filed in the U.S.D.C. for the Northern District of Illinois against Baxter and its current Chief Executive Officer and then current Chief Financial Officer and their predecessors for alleged violations of the Employee Retirement Income Security Act of 1974, as amended.  Plaintiff alleges that these defendants, along with the Administrative and Investment Committees of the company’s 401(k) plans, breached their fiduciary duties to the plan participants by offering Baxter common stock as an investment option in each of the plans during the period of January 2001 to October 2004.  In March 2006, the trial court certified a class of plan participants who elected to acquire Baxter common stock through the plans between January 2001 and the present.  In April 2008, the Court of Appeals for the Seventh Circuit denied Baxter’s interlocutory appeal and upheld the trial court’s denial of Baxter’s motion to dismiss.  Baxter has filed a motion for judgment on the pleadings.  Fact discovery has been completed in this matter and expert discovery is proceeding.   On October 12, 2005 the United States filed a complaint in the U.S.D.C. for the Northern District of Illinois to effect the seizure of COLLEAGUE and SYNDEO pumps that were on hold in Northern Illinois.  Customer-owned pumps were not affected.  On June 29, 2006, Baxter Healthcare Corporation, a direct wholly-owned subsidiary of Baxter, entered into a Consent Decree for Condemnation and Permanent Injunction with the United States to resolve this seizure litigation. The Consent Decree also outlines the steps the company must take to resume sales of new pumps in the United States.  Additional third party claims may be filed in connection with the COLLEAGUE matter.   On July 15, 2009, a hospital customer filed suit in the U.S.D.C. for the Eastern District of Pennsylvania alleging that Baxter and a competitor conspired to restrict output and artificially increase the price of plasma-derived therapies since late 2004.  The complaint attempts to state a claim for class action relief and demands treble damages.   In connection with the recall of heparin products in the United States described in Note 3, approximately 165 lawsuits, some of which are purported class actions, have been filed alleging that plaintiffs suffered various reactions to a heparin contaminant, in some cases resulting in fatalities.  In June 2008, a number of these federal cases were consolidated in the U.S.D.C. for the Northern District of Ohio for pretrial case management under the Multi District Litigation rules.  In September 2008, a number of state court cases were consolidated in Cook County, Illinois for pretrial case management.  Discovery is ongoing and a trial date is scheduled for October 2010.   The company is a defendant, along with others, in over 50 lawsuits brought in various state and U.S. federal courts, which allege that Baxter and other defendants reported artificially inflated average wholesale prices for Medicare and Medicaid eligible drugs.  These cases have been brought by private parties on behalf of various purported classes of purchasers of Medicare and Medicaid eligible drugs, as well as by state attorneys general.  A number of these cases were consolidated in the U.S.D.C. for the District of Massachusetts for pretrial case management under Multi District Litigation rules.  In April 2008, the court preliminarily approved a class settlement resolving Medicare Part B claims and independent health plan claims against Baxter and others, which had previously been reserved for by the company.  Final approval of this settlement is expected later in 2009.  Remaining lawsuits against Baxter include a number of cases brought by state attorneys general and New York entities, which seek unspecified damages, injunctive relief, civil penalties, disgorgement, forfeiture and restitution.  Various state and federal agencies are conducting civil investigations into the marketing and pricing practices of Baxter and others with respect to Medicare and Medicaid reimbursement.  These investigations may result in additional cases being filed by various state attorneys general.   Baxter currently is a defendant in a number of lawsuits and subject to additional claims brought by individuals who have hemophilia and their families, all seeking damages for injuries allegedly caused by anti-hemophilic factor concentrates VIII or IX derived from human blood plasma (factor concentrates) processed by the company and other acquired entities from the late 1970s to the mid-1980s.  The typical case or claim alleges that the individual was infected with the HIV or HCV virus by factor concentrates that contained one or both viruses.  None of these cases involves factor concentrates currently processed by the company. <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} /*]]>*/ </style> </div>

<div> <h6> <a name="_AUC09cec14854db4c5f9c7623c39ce87346"> Comprehensive income</a> </h6>   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.6%;border:none;border-top: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.0pt">   </td> <td width="42%" nowrap="nowrap" valign="bottom" style= "width:42.6%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.68%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="23%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:23.6%;border: none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Three months ended </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.74%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="21%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:21.8%;border: none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Six months ended </td> </tr> <tr style="mso-yfti-irow:1;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.6%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="42%" nowrap="nowrap" valign="bottom" style= "width:42.6%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.68%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="23%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:23.6%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.74%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="21%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:21.8%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> </tr> <tr style="mso-yfti-irow:2;height:12.0pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.2%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (in millions) </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.92%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.9%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.74%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.88%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.2%;padding: 0in 5.4pt 0in 5.4pt;height:12.75pt"> Comprehensive income </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $819 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.9%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $590 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.74%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.14%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $1,241 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.88%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $1,206 </td> </tr> <tr style="mso-yfti-irow:4;height:25.5pt"> <td width="47%" colspan="2" valign="bottom" style= "width:47.2%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt"> Less: Comprehensive income attributable to noncontrolling interests </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.92%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt"> 7 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.9%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt"> 8 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.74%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt"> 5 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.88%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt"> 4 </td> </tr> <tr style= "mso-yfti-irow:5;mso-yfti-lastrow:yes;height:13.5pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.2%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Comprehensive income attributable to Baxter </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.68%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.92%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $812 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.9%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $582 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.74%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.14%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $1,236 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.88%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $1,202 </td> </tr> </table>   The increase in comprehensive income attributable to Baxter for the three months ended June 30, 2009 was principally due to favorable movements in currency translation adjustments and higher net income attributable to Baxter.  The increase in comprehensive income attributable to Baxter for the six months ended June 30, 2009 was due to higher net income attributable to Baxter, partially offset by less favorable movements in currency translation adjustments compared to the first half of 2008.  <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; 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<div> <a name= "_AUC4c9c0e56ba094468877d2f2e88140e21">4</a>.     DEBT, FINANCIAL INSTRUMENTS AND RELATED FAIR VALUE MEASUREMENTS   <h6> Debt </h6>   In February 2009, the company issued $350 million of senior unsecured notes, maturing in March 2014 and bearing a 4.0% coupon rate.  The net proceeds were used for general corporate purposes, including the repayment of approximately $160 million of outstanding borrowings related to the company’s Euro-denominated credit facility.  There were no borrowings outstanding under the company’s primary revolving or Euro-denominated credit facilities as of June 30, 2009.  In addition, during the first six months of 2009, the company issued and redeemed commercial paper, of which $200 million was outstanding as of June 30, 2009, with a weighted-average interest rate of 0.34%. <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} /*]]>*/ </style> </div>

<div> <a name= "_AUCd7d03108839a4aaabd7ae412e04cc3de"> Derivatives and hedging activities</a>   The company operates on a global basis and is exposed to the risk that its earnings, cash flows and equity could be adversely impacted by fluctuations in foreign exchange and interest rates.  The company’s hedging policy attempts to manage these risks to an acceptable level based on the company’s judgment of the appropriate trade-off between risk, opportunity and costs.   The company is primarily exposed to foreign exchange risk with respect to recognized assets and liabilities, forecasted transactions and net assets denominated in the Euro, Japanese Yen, British Pound, Australian Dollar, Canadian Dollar and certain Latin American currencies.  The company manages its foreign currency exposures on a consolidated basis, which allows the company to net exposures and take advantage of any natural offsets.  In addition, the company uses derivative and nonderivative instruments to further reduce the net exposure to foreign exchange.  Gains and losses on the hedging instruments offset losses and gains on the hedged transactions and reduce the earnings and equity volatility resulting from foreign exchange.  The recent financial market and currency volatility may reduce the benefits of the company’s natural hedges and limit the company’s ability to cost-effectively hedge these exposures.   The company is also exposed to the risk that its earnings and cash flows could be adversely impacted by fluctuations in interest rates.  The company’s policy is to manage interest costs using a mix of fixed- and floating-rate debt that the company believes is appropriate.  To manage this mix in a cost-efficient manner, the company periodically enters into interest rate swaps in which the company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional amount.   <h5 style="margin-left:0in"> The company does not hold any instruments for trading purposes and none of the company’s outstanding derivative instruments contain credit-risk-related contingent features. </h5> <h5 style="margin-left:0in">   </h5> All derivative instruments are recognized as either assets or liabilities at fair value in the consolidated balance sheets and are classified as short-term or long-term based on the scheduled maturity of the instrument.  Based upon the exposure being hedged, the company designates its hedging instruments as cash flow or fair value hedges.   <h5 style="margin-left:0in"> Cash Flow Hedges </h5> The company uses options, including collars and purchased options, forwards and cross-currency swaps to hedge the foreign exchange risk to earnings relating to forecasted transactions denominated in foreign currencies and recognized assets and liabilities.  The company periodically uses forward-starting interest rate swaps and treasury rate locks to hedge the risk to earnings associated with movements in interest rates relating to anticipated issuances of debt.  Certain other firm commitments and forecasted transactions are also periodically hedged.  Cash flow hedges primarily relate to forecasted intercompany sales denominated in foreign currencies, anticipated issuances of debt and a hedge of U.S. Dollar-denominated debt issued by a foreign subsidiary.   For each derivative instrument that is designated and effective as a cash flow hedge, the gain or loss on the derivative is accumulated in accumulated other comprehensive income (AOCI), a component of equity, and then recognized in earnings consistent with the underlying hedged item.  Option premiums or net premiums paid are initially recorded as assets and reclassified to other comprehensive income (OCI) over the life of the option, and then recognized in earnings consistent with the underlying hedged item.   The notional amounts of foreign exchange contracts, interest rate contracts and cross-currency swaps (used to hedge U.S. Dollar-denominated debt issued by a foreign subsidiary) were $1.7 billion, $450 million and $500 million, respectively, as of June 30, 2009.    As of June 30, 2009, $10 million of deferred, net after-tax gains on derivative instruments included in AOCI are expected to be recognized in earnings during the next 12 months, coinciding with when the hedged items are expected to impact earnings.   The maximum term over which the company has cash flow hedge contracts in place related to forecasted transactions at June 30, 2009 is 18 months.   Fair Value Hedges The company uses interest rate swaps to convert a portion of its fixed-rate debt into variable-rate debt.  These instruments hedge the company’s earnings from changes in the fair value of debt due to fluctuations in the designated benchmark interest rate.  For each derivative instrument that is designated and effective as a fair value hedge, the gain or loss on the derivative is recognized immediately to earnings, and offsets the gain or loss on the underlying hedged item.   The total notional amount of interest rate contracts designated as fair value hedges was $1.6 billion as of June 30, 2009.   Dedesignations If it is determined thata derivative or nonderivative hedging instrument is no longer highly effective as a hedge, the company discontinues hedge accounting prospectively.  If the company removes the cash flow hedge designation because the hedged forecasted transactions are no longer probable of occurring, any gains or losses are immediately reclassified from AOCI to earnings.  Gains or losses relating to terminations of effective cash flow hedges in which the forecasted transactions are still probable of occurring are deferred and recognized consistent with the income or loss recognition of the underlying hedged items.  If the company terminates a fair value hedge, an amount equal to the cumulative fair value adjustment to the hedged items at the date of termination is amortized to earnings over the remaining term of the hedged item.  In the second quarter of 2009, the company terminated $250 million of its interest rate contracts, resulting in a net gain of $5 million that was deferred in AOCI.   Undesignated Derivative Instruments The company uses forward contracts to hedge earnings from the effects of foreign exchange relating to certain of the company’s intercompany and third-party receivables and payables denominated in a foreign currency.  These derivative instruments are generally not formally designated as hedges, and the change in fair value of the instruments, which substantially offsets the change in book value of the hedged items, is recorded directly to other (income) expense, net.  Generally, the terms of these instruments do not exceed one month.     The total notional amount of undesignated derivative instruments was $399 million as of June 30, 2009.   Gains and Losses on Derivative Instruments The following tables summarize the locations and gains and losses on the company’s derivative instruments for the three and six months ended June 30, 2009.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "border-collapse:collapse;mso-table-layout-alt:fixed;mso-yfti-tbllook: 1184;mso-padding-alt:0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.95pt"> <td width="25%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:25.56%; border:none;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="25%" colspan="3" valign="bottom" style= "width:25.42%;border-top:solid windowtext 1.0pt; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none; mso-border-top-alt:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> (Gain) loss recognized in OCI </td> <td width="2%" valign="top" style= "width:2.82%;border:none;border-top:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="17%" nowrap="nowrap" valign="bottom" style= "width:17.86%;border:none; border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> </td> <td width="25%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:25.52%; border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt; border-right:none;mso-border-top-alt:solid windowtext 1.0pt;mso-border-bottom-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> (Gain) loss reclassified from AOCI into income </td> </tr> <tr style="mso-yfti-irow:1;height:12.95pt"> <td width="25%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:25.56%; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> </td> <td width="12%" valign="bottom" style= "width:12.26%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;mso-border-top-alt: solid windowtext .5pt;mso-border-bottom-alt:solid windowtext .5pt;padding: 0in 5.4pt 0in 5.4pt;height:12.95pt"> Three months ended </td> <td width="2%" valign="bottom" style= "width:2.82%;border:none;border-top:solid windowtext 1.0pt; mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.95pt">   </td> <td width="10%" valign="bottom" style= "width:10.34%;border-top:solid windowtext 1.0pt; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none; mso-border-top-alt:solid windowtext .5pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Six months ended </td> <td width="2%" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt">   </td> <td width="17%" valign="bottom" style= "width:17.86%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="12%" valign="bottom" style= "width:12.22%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;mso-border-top-alt: solid windowtext .5pt;mso-border-bottom-alt:solid windowtext .5pt;padding: 0in 5.4pt 0in 5.4pt;height:12.95pt"> Three months ended </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> </td> <td width="10%" valign="bottom" style= "width:10.48%;border-top:solid windowtext 1.0pt; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none; mso-border-top-alt:solid windowtext .5pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Six months ended </td> </tr> <tr style="mso-yfti-irow:2;height:12.95pt"> <td width="25%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:25.56%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> (in millions) </td> <td width="25%" colspan="3" valign="bottom" style= "width:25.42%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> June 30, 2009 </td> <td width="2%" valign="bottom" style= "width:2.82%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="17%" valign="bottom" style= "width:17.86%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Location of (gain) loss in income statement </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> </td> <td width="25%" colspan="3" valign="bottom" style= "width:25.52%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> June 30, 2009 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="25%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:25.56%; border:none;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Cash flow hedges </td> <td width="12%" valign="bottom" style= "width:12.26%;border:none;mso-border-top-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="2%" valign="bottom" style= "width:2.82%;border:none;mso-border-top-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="10%" valign="bottom" style= "width:10.34%;border:none;mso-border-top-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> <td width="2%" valign="bottom" style= "width:2.82%;border:none;mso-border-top-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="17%" valign="bottom" style= "width:17.86%;border:none;mso-border-top-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" valign="bottom" style= "width:12.22%;border:none;mso-border-top-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" valign="bottom" style= "width:10.48%;border:none;mso-border-top-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="25%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:25.56%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Interest rate contracts </td> <td width="12%" valign="bottom" style= "width:12.26%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $(56) </td> <td width="2%" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $(76) </td> <td width="2%" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">   </td> <td width="17%" nowrap="nowrap" valign="bottom" style= "width:17.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Net interest expense </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.22%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $- </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.48%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $1 </td> </tr> <tr style="mso-yfti-irow:5;height:12.75pt"> <td width="25%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:25.56%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Foreign exchange contracts </td> <td width="12%" valign="bottom" style= "width:12.26%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> - </td> <td width="2%" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 1 </td> <td width="2%" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">   </td> <td width="17%" nowrap="nowrap" valign="bottom" style= "width:17.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Net sales </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.22%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> (2) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.48%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> (4) </td> </tr> <tr style="mso-yfti-irow:6;height:12.75pt"> <td width="25%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:25.56%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Foreign exchange contracts </td> <td width="12%" valign="bottom" style= "width:12.26%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 30 </td> <td width="2%" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 18 </td> <td width="2%" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">   </td> <td width="17%" nowrap="nowrap" valign="bottom" style= "width:17.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Cost of sales </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.22%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> (20) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.48%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> (44) </td> </tr> <tr style="mso-yfti-irow:7;height:25.5pt"> <td width="25%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:25.56%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt"> Foreign exchange contracts </td> <td width="12%" valign="bottom" style= "width:12.26%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt">  17 </td> <td width="2%" valign="bottom" style= "width:2.82%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt">  19 </td> <td width="2%" valign="bottom" style= "width:2.82%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt">   </td> <td width="17%" valign="bottom" style= "width:17.86%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt"> Other (income) expense, net </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.22%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt">  15 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.48%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.5pt"> 6 </td> </tr> <tr style= "mso-yfti-irow:8;mso-yfti-lastrow:yes;height:13.5pt"> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.58%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Total </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.98%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> </td> <td width="12%" valign="bottom" style= "width:12.26%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:13.5pt"> $(9) </td> <td width="2%" valign="bottom" style= "width:2.82%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:13.5pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $(38) </td> <td width="2%" valign="bottom" style= "width:2.82%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:13.5pt">   </td> <td width="17%" nowrap="nowrap" valign="bottom" style= "width:17.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.22%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $(7) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.48%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $(41) </td> </tr><![if !supportMisalignedColumns]> <tr height="0"> <td width="66" style="border:none"></td> <td width="114" style="border:none"></td> <td width="86" style="border:none"></td> <td width="15" style="border:none"></td> <td width="72" style="border:none"></td> <td width="15" style="border:none"></td> <td width="128" style="border:none"></td> <td width="15" style="border:none"></td> <td width="113" style="border:none"></td> <td width="26" style="border:none"></td> <td width="97" style="border:none"></td> </tr><![endif]> </table>       <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="99%" style= "border-collapse:collapse;mso-table-layout-alt:fixed;mso-yfti-tbllook: 1184;mso-padding-alt:0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.95pt"> <td width="25%" nowrap="nowrap" valign="bottom" style= "width:25.6%;border:none; border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="27%" nowrap="nowrap" valign="bottom" style= "width:27.3%;border:none; border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="41%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:41.44%; border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt; border-right:none;mso-border-top-alt:solid windowtext 1.0pt;mso-border-bottom-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Loss recognized in income </td> </tr> <tr style="mso-yfti-irow:1;height:12.75pt"> <td width="25%" nowrap="nowrap" valign="bottom" style= "width:25.6%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="27%" valign="bottom" style= "width:27.3%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="20%" valign="bottom" style= "width:20.72%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;mso-border-top-alt: solid windowtext .5pt;mso-border-bottom-alt:solid windowtext .5pt;padding: 0in 5.4pt 0in 5.4pt;height:12.75pt"> Three months ended </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> <td width="17%" valign="bottom" style= "width:17.9%;border-top:solid windowtext 1.0pt; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none; mso-border-top-alt:solid windowtext .5pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Six months ended </td> </tr> <tr style="mso-yfti-irow:2;height:12.75pt"> <td width="25%" nowrap="nowrap" valign="bottom" style= "width:25.6%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> (in millions) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> <td width="27%" valign="bottom" style= "width:27.3%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Location of loss in income statement </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> <td width="41%" colspan="3" valign="bottom" style= "width:41.44%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> June 30, 2009 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="25%" nowrap="nowrap" valign="bottom" style= "width:25.6%;border:none; mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Fair value hedges </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="27%" valign="bottom" style= "width:27.3%;border:none;mso-border-top-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="20%" valign="bottom" style= "width:20.72%;border:none;mso-border-top-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="17%" valign="bottom" style= "width:17.9%;border:none;mso-border-top-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> </tr> <tr style="mso-yfti-irow:4;height:12.95pt"> <td width="25%" nowrap="nowrap" valign="bottom" style= "width:25.6%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Interest rate contracts </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> </td> <td width="27%" nowrap="nowrap" valign="bottom" style= "width:27.3%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Net interest expense </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> </td> <td width="20%" nowrap="nowrap" valign="bottom" style= "width:20.72%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> $66 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> </td> <td width="17%" nowrap="nowrap" valign="bottom" style= "width:17.9%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> $83 </td> </tr> <tr style="mso-yfti-irow:5;height:12.95pt"> <td width="25%" valign="bottom" style= "width:25.6%;border:none;mso-border-top-alt: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Undesignated derivative instruments </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="27%" valign="bottom" style= "width:27.3%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="20%" valign="bottom" style= "width:20.72%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="17%" valign="bottom" style= "width:17.9%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> </tr> <tr style= "mso-yfti-irow:6;mso-yfti-lastrow:yes;height:12.95pt"> <td width="25%" nowrap="nowrap" valign="bottom" style= "width:25.6%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Foreign exchange contracts </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> </td> <td width="27%" valign="bottom" style= "width:27.3%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Other (income) expense, net </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> </td> <td width="20%" nowrap="nowrap" valign="bottom" style= "width:20.72%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> $17 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> </td> <td width="17%" nowrap="nowrap" valign="bottom" style= "width:17.9%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> $44 </td> </tr> </table>   For the company’s fair value hedges, equal and offsetting gains of $66 million and $83 million were recognized in net interest expense for the second quarter and first half of 2009, respectively, as an adjustment to the underlying hedged item, fixed-rate debt.   Ineffectiveness related to the company’s cash flow and fair value hedges in the six months ended June 30, 2009 was not material.   Fair Values of Derivative Instruments The following table summarizes the location and fair value amounts of derivative instruments reported in the consolidated balance sheet as of June 30, 2009.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.95pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.14%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="21%" nowrap="nowrap" valign="bottom" style= "width:21.42%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="34%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:34.8%;border-top: solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt; border-right:none;mso-border-top-alt:solid windowtext .5pt;mso-border-bottom-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Derivatives in asset positions </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="34%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:34.08%; border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt; border-right:none;mso-border-top-alt:solid windowtext .5pt;mso-border-bottom-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Derivatives in liability positions </td> </tr> <tr style="mso-yfti-irow:1;height:12.95pt"> <td width="25%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:25.56%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> (in millions) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="23%" nowrap="nowrap" valign="bottom" style= "width:23.08%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Balance sheet location </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Fair value </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="22%" nowrap="nowrap" valign="bottom" style= "width:22.36%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Balance sheet location </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Fair value </td> </tr> <tr style="mso-yfti-irow:2;height:28.5pt"> <td width="25%" colspan="2" valign="bottom" style= "width:25.56%;border:none; mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:28.5pt"> Derivative instruments designated as hedges </td> <td width="2%" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:28.5pt"> </td> <td width="23%" valign="bottom" style= "width:23.08%;padding:0in 5.4pt 0in 5.4pt; height:28.5pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;padding:0in 5.4pt 0in 5.4pt; height:28.5pt"> </td> <td width="9%" valign="bottom" style= "width:9.0%;padding:0in 5.4pt 0in 5.4pt; height:28.5pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;padding:0in 5.4pt 0in 5.4pt; height:28.5pt"> </td> <td width="22%" valign="bottom" style= "width:22.36%;padding:0in 5.4pt 0in 5.4pt; height:28.5pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;padding:0in 5.4pt 0in 5.4pt; height:28.5pt"> </td> <td width="9%" valign="bottom" style= "width:9.0%;padding:0in 5.4pt 0in 5.4pt; height:28.5pt"> </td> </tr> <tr style="mso-yfti-irow:3;height:12.95pt"> <td width="25%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:25.56%; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Interest rate contracts </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="23%" nowrap="nowrap" valign="bottom" style= "width:23.08%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> Prepaid expenses and other </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> $28 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="22%" valign="bottom" style= "width:22.36%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> </tr> <tr style="mso-yfti-irow:4;height:12.95pt"> <td width="25%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:25.56%; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Interest rate contracts </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="23%" nowrap="nowrap" valign="bottom" style= "width:23.08%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> Other long-term assets </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> 59 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="22%" valign="bottom" style= "width:22.36%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> Other long-term liabilities </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> $3 </td> </tr> <tr style="mso-yfti-irow:5;height:12.95pt"> <td width="25%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:25.56%; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Foreign exchange contracts </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="23%" valign="bottom" style= "width:23.08%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> Prepaid expenses and other </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> 56 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="22%" valign="bottom" style= "width:22.36%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt">  Accounts payable and accrued liabilities </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> 5 </td> </tr> <tr style="mso-yfti-irow:6;height:12.95pt"> <td width="25%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:25.56%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Foreign exchange contracts </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="23%" nowrap="nowrap" valign="bottom" style= "width:23.08%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Other long-term assets </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">  8 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="22%" nowrap="nowrap" valign="bottom" style= "width:22.36%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">  Other long-term liabilities </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt">  79 </td> </tr> <tr style="mso-yfti-irow:7;height:12.95pt"> <td width="25%" colspan="2" valign="bottom" style= "width:25.56%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Total derivative instruments designated as hedges </td> <td width="2%" valign="bottom" style= "width:2.82%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="23%" nowrap="nowrap" valign="bottom" style= "width:23.08%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> $151 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="22%" nowrap="nowrap" valign="bottom" style= "width:22.36%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> $87 </td> </tr> <tr style="mso-yfti-irow:8;height:12.95pt"> <td width="25%" colspan="2" valign="bottom" style= "width:25.56%;border:none; mso-border-top-alt:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> Undesignated derivative instruments </td> <td width="2%" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="23%" valign="bottom" style= "width:23.08%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="9%" valign="bottom" style= "width:9.0%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="22%" valign="bottom" style= "width:22.36%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="9%" valign="bottom" style= "width:9.0%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> </tr> <tr style="mso-yfti-irow:9;height:12.95pt"> <td width="25%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:25.56%; border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> Foreign exchange contracts </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="23%" valign="bottom" style= "width:23.08%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Prepaid expenses and other </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> $- </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="22%" valign="bottom" style= "width:22.36%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Accounts payable and accrued liabilities </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> $- </td> </tr> <tr style= "mso-yfti-irow:10;mso-yfti-lastrow:yes;height:12.75pt"> <td width="25%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:25.56%; border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Total derivative instruments </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="23%" nowrap="nowrap" valign="bottom" style= "width:23.08%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> $151 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="22%" nowrap="nowrap" valign="bottom" style= "width:22.36%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.72%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.0%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> $87 </td> </tr> </table>   <h5 style="margin-left:0in;line-height:12.0pt"> Presentation in the Statement of Cash Flows </h5> Derivatives, including those that are not designated as hedges under GAAP, are principally classified in the operating section of the consolidated statements of cash flows, in the same category as the related consolidated balance sheet account.  Derivatives that include an other-than-insignificant financing element at inception are classified in the financing section of the consolidated statements of cash flows. <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; 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<div> <a name= "_AUC2365490adcc34c1a8ac2f300f84c8a6c">5</a>.     COMMON STOCK   Stock-based compensation plans Stock compensation expense totaled $36 million and $35 million for the three months ended June 30, 2009 and 2008, respectively, and $74 million and $73 million for the six months ended June 30, 2009 and 2008, respectively.  Approximately three-quarters of stock compensation expense is classified in marketing and administrative expenses, with the remainder classified in cost of sales and R&D expenses.      In March 2009, the company awarded its annual stock compensation grants, which consisted of approximately 6.7 million stock options and 580,000 performance share units (PSUs).  Stock compensation grants made in the second quarter of 2009 were not material.   Stock Options The weighted-average assumptions used in estimating the fair value of stock options granted during the period, along with the weighted-average grant date fair values, were as follows.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.68%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="41%" nowrap="nowrap" valign="bottom" style= "width:41.26%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.9%;border:none;border-top: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.0pt">   </td> <td width="21%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:21.14%; border:none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.98%; border:none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Six months ended </td> </tr> <tr style="mso-yfti-irow:1;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.68%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="41%" nowrap="nowrap" valign="bottom" style= "width:41.26%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.9%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="21%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:21.14%; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.98%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> </tr> <tr style="mso-yfti-irow:2;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="41%" nowrap="nowrap" valign="bottom" style= "width:41.26%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.9%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.06%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.7%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.94%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Expected volatility </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.9%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.14%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 30% </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.7%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.14%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 24% </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.94%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Expected life (in years) </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.9%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.14%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">            4.5 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.7%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.14%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">            4.5 </td> </tr> <tr style="mso-yfti-irow:5;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.94%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Risk-free interest rate </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.9%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.14%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 1.8% </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.7%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.14%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 2.4% </td> </tr> <tr style="mso-yfti-irow:6;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.94%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Dividend yield </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.9%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.14%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 2.0% </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.7%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.14%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 1.5% </td> </tr> <tr style= "mso-yfti-irow:7;mso-yfti-lastrow:yes;height:13.5pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.94%; border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt; height:13.5pt"> Fair value per stock option </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.9%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.06%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.14%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $12 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.7%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.14%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $12 </td> </tr> </table>   The total intrinsic value of stock options exercised was $16 million and $71 million during the three months ended June 30, 2009 and 2008, respectively, and $45 million and $132 million during the six months ended June 30, 2009 and 2008, respectively.   As of June 30, 2009, $119 million of unrecognized compensation cost related to all unvested stock options is expected to be recognized as expense over a weighted-average period of 2.1 years.   Performance Share and Restricted Stock Units The assumptions used in estimating the fair value of PSUs granted during the period, along with the fair values, were as follows.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.66%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="41%" nowrap="nowrap" valign="bottom" style= "width:41.2%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.88%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="21%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:21.1%;border: none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="23%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:23.08%; border:none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Six months ended </td> </tr> <tr style="mso-yfti-irow:1;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.66%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="41%" nowrap="nowrap" valign="bottom" style= "width:41.2%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.88%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="21%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:21.1%;padding: 0in 5.4pt 0in 5.4pt;height:12.0pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="23%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:23.08%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> </tr> <tr style="mso-yfti-irow:2;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.66%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="41%" nowrap="nowrap" valign="bottom" style= "width:41.2%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.88%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.18%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.7%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.18%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.86%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Baxter volatility </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.88%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.18%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 25% </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.7%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.18%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 20% </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.86%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Peer group volatility </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.88%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.18%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">  20% - 59% </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.7%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.18%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">  12% - 37% </td> </tr> <tr style="mso-yfti-irow:5;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.86%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Correlation of returns </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.88%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.18%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">  0.30 - 0.61 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.7%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.18%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">  0.12 - 0.40 </td> </tr> <tr style="mso-yfti-irow:6;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.86%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Risk-free interest rate </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.88%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.18%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 1.6% </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.7%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.18%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 1.9% </td> </tr> <tr style= "mso-yfti-irow:7;mso-yfti-lastrow:yes;height:13.5pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.86%; border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt; height:13.5pt"> Fair value per PSU </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.88%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="7%" nowrap="nowrap" valign="bottom" style= "width:7.04%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.18%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $65 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.7%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.18%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $64 </td> </tr> </table>   <span style= "font-size:10.0pt;mso-bidi-font-size:12.0pt;font-family:Times New Roman,serif; mso-fareast-font-family:Times New Roman;mso-ansi-language:EN-US;mso-fareast-language: EN-US;mso-bidi-language:AR-SA">As of June 30, 2009, unrecognized compensation cost related to all unvested PSUs of $53 million is expected to be recognized as expense over a weighted-average period of 1.9 years, and unrecognized compensation cost related to all unvested restricted stock units of $11 million is expected to be recognized as expense over a weighted-average period of 1.7 years. <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} /*]]>*/ </style> </div>

<div> <a name="_AUC1fb3d901a92943e8952a79a102af1b5a">Earnings per share</a>   The numerator for both basic and diluted earnings per share (EPS) is net income attributable to Baxter.  The denominator for basic EPS is the weighted-average number of common shares outstanding during the period.  The dilutive effect of outstanding employee stock options, performance share units and restricted stock units is reflected in the denominator for diluted EPS using the treasury stock method.   The following is a reconciliation of basic shares to diluted shares.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.6%;border:none;border-top: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.0pt">   </td> <td width="40%" nowrap="nowrap" valign="bottom" style= "width:40.56%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.8%;border:none;border-top: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.0pt">   </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.52%; border:none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Three months ended </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.0%;border:none;border-top: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.0pt">   </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.52%; border:none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Six months ended </td> </tr> <tr style="mso-yfti-irow:1;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.6%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="40%" nowrap="nowrap" valign="bottom" style= "width:40.56%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.8%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.52%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.0%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.52%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> </tr> <tr style="mso-yfti-irow:2;height:12.0pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.16%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (in millions) </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.8%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.06%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.66%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.0%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.06%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.66%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.16%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Basic shares </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.8%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 607 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.66%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">           626 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.0%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 610 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.66%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">           629 </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="50%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:50.96%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Effect of employee stock options and other dilutive securities </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.06%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">  5 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.66%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">             12 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.0%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.06%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">  6 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.66%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">             12 </td> </tr> <tr style= "mso-yfti-irow:5;mso-yfti-lastrow:yes;height:13.5pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.16%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Diluted shares </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.8%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.06%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> 612 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.66%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">           638 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.0%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.06%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> 616 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.66%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">           641 </td> </tr> </table>   The computation of diluted EPS excludes employee stock options to purchase 23 million and 8 million shares for the three months ended June 30, 2009 and 2008, respectively, and 17 million and 8 million shares for the six months ended June 30, 2009 and 2008, respectively, because the assumed proceeds were greater than the average market price of the company’s common stock, resulting in an anti-dilutive effect on diluted EPS. <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} /*]]>*/ </style> </div>

<div> <h6> <a name="_AUC0633614d9aad4c22b1e1b19d73e84847">Fair value</a> measurements </h6>   The following table summarizes the bases used to measure financial assets and liabilities that are carried at fair value on a recurring basis in the balance sheet.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.94%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="24%" nowrap="nowrap" valign="bottom" style= "width:24.04%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.46%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="52%" nowrap="nowrap" colspan="5" valign="bottom" style= "width:52.72%; border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt; border-right:none;mso-border-top-alt:solid windowtext .5pt;mso-border-bottom-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Basis of fair value measurement </td> </tr> <tr style="mso-yfti-irow:1;height:33.75pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.94%;padding:0in 5.4pt 0in 5.4pt; height:33.75pt"> </td> <td width="24%" nowrap="nowrap" valign="bottom" style= "width:24.04%;padding:0in 5.4pt 0in 5.4pt; height:33.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.46%;padding:0in 5.4pt 0in 5.4pt; height:33.75pt"> Balance at </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:33.75pt"> </td> <td width="15%" valign="bottom" style= "width:15.96%;padding:0in 5.4pt 0in 5.4pt; height:33.75pt"> Quoted prices in active markets for identical assets </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:33.75pt"> </td> <td width="15%" valign="bottom" style= "width:15.08%;padding:0in 5.4pt 0in 5.4pt; height:33.75pt"> Significant other observable inputs </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:33.75pt"> </td> <td width="15%" valign="bottom" style= "width:15.96%;padding:0in 5.4pt 0in 5.4pt; height:33.75pt"> Significant unobservable inputs </td> </tr> <tr style="mso-yfti-irow:2;height:12.0pt"> <td width="28%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:28.98%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (in millions) </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.46%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (Level 1) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.08%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (Level 2) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (Level 3) </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="28%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:28.98%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Assets </td> <td width="15%" valign="bottom" style= "width:15.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" valign="bottom" style= "width:15.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" valign="bottom" style= "width:15.08%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" valign="bottom" style= "width:15.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="28%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:28.98%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Foreign exchange contracts </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $64 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $- </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.08%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $64 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $- </td> </tr> <tr style="mso-yfti-irow:5;height:12.75pt"> <td width="28%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:28.98%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Interest rate contracts </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 87 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> - </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.08%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 87 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> -                             </td> </tr> <tr style="mso-yfti-irow:6;height:12.75pt"> <td width="28%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:28.98%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Equity securities </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.46%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> 16 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">  16 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.08%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">  - </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> -                             </td> </tr> <tr style="mso-yfti-irow:7;height:13.5pt"> <td width="28%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:28.98%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Total assets </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.46%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $167 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $16 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.08%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $151 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $- </td> </tr> <tr style="mso-yfti-irow:8;height:12.75pt"> <td width="28%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:28.98%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Liabilities </td> <td width="15%" valign="bottom" style= "width:15.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" valign="bottom" style= "width:15.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" valign="bottom" style= "width:15.08%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" valign="bottom" style= "width:15.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> </tr> <tr style="mso-yfti-irow:9;height:12.75pt"> <td width="28%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:28.98%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Foreign exchange contracts </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $84 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $- </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.08%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $84 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $- </td> </tr> <tr style="mso-yfti-irow:10;height:12.75pt"> <td width="28%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:28.98%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Interest rate contracts </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.46%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">  3 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> -                             </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.08%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> 3 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> -                            </td> </tr> <tr style= "mso-yfti-irow:11;mso-yfti-lastrow:yes;height:13.5pt"> <td width="28%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:28.98%; border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt; height:13.5pt"> Total liabilities </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.46%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $87 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $- </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.08%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $87 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.96%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $- </td> </tr> </table>   For assets that are measured using quoted prices in active markets, the fair value is the published market price per unit multiplied by the number of units held, without consideration of transaction costs.  The majority of the derivatives entered into by the company are valued using internal valuation techniques as no quoted market prices exist for such instruments.  The principal techniques used to value these instruments are discounted cash flow and Black-Scholes models.  The key inputs are considered observable and vary depending on the type of derivative, and include contractual terms, interest rate yield curves, foreign exchange rates and volatility.     On January 1, 2009, the company completed the adoption of SFAS No. 157, “Fair Value Measurements,” as it relates to nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis.  There were no adjustments in the first six months of 2009 for nonfinancial assets or liabilities that are measured at fair value on a nonrecurring basis.   Book Values and Fair Values of Financial Instruments In addition to the financial instruments that the company is required to recognize at fair value on the consolidated balance sheets, the company has certain financial instruments that are recognized at historical cost or some basis other than fair value.  For these financial instruments, the following table provides the value recognized on the consolidated balance sheets and the approximate fair value as of June 30, 2009.    <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:20.25pt"> <td width="29%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:29.64%; border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt; border-right:none;mso-border-top-alt:solid windowtext .5pt;mso-border-bottom-alt: solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt;height:20.25pt"> (in millions) </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.36%;border-top:solid windowtext 1.0pt; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none; mso-border-top-alt:solid windowtext .5pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:20.25pt">   </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border-top:solid windowtext 1.0pt; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none; mso-border-top-alt:solid windowtext .5pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:20.25pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.32%;border-top:solid windowtext 1.0pt; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none; mso-border-top-alt:solid windowtext .5pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:20.25pt">   </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border-top:solid windowtext 1.0pt; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none; mso-border-top-alt:solid windowtext .5pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:20.25pt">   </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;border-top:solid windowtext 1.0pt; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none; mso-border-top-alt:solid windowtext .5pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:20.25pt"> Book value </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border-top:solid windowtext 1.0pt; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none; mso-border-top-alt:solid windowtext .5pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:20.25pt">   </td> <td width="15%" valign="bottom" style= "width:15.84%;border-top:solid windowtext 1.0pt; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none; mso-border-top-alt:solid windowtext .5pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:20.25pt"> Approximate fair value </td> </tr> <tr style="mso-yfti-irow:1;height:12.75pt"> <td width="29%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:29.64%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Assets </td> <td width="15%" valign="bottom" style= "width:15.36%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" valign="bottom" style= "width:15.32%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> </tr> <tr style="mso-yfti-irow:2;height:12.75pt"> <td width="29%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:29.64%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Short-term investments </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.36%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.32%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $34 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $34 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="29%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:29.64%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Long-term insurance receivables </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.36%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.32%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 67 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 63 </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="29%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:29.64%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Cost basis investments </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.36%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.32%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 19 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 19 </td> </tr> <tr style="mso-yfti-irow:5;height:6.0pt"> <td width="14%" nowrap="nowrap" valign="bottom" style= "width:14.82%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="14%" nowrap="nowrap" valign="bottom" style= "width:14.82%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.36%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.32%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> </tr> <tr style="mso-yfti-irow:6;height:12.75pt"> <td width="29%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:29.64%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Liabilities </td> <td width="15%" valign="bottom" style= "width:15.36%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" valign="bottom" style= "width:15.32%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> </tr> <tr style="mso-yfti-irow:7;height:12.75pt"> <td width="29%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:29.64%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Short-term debt </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.36%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.32%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $234 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $234 </td> </tr> <tr style="mso-yfti-irow:8;height:12.75pt"> <td width="63%" nowrap="nowrap" colspan="5" valign="bottom" style= "width:63.0%;padding: 0in 5.4pt 0in 5.4pt;height:12.75pt"> Current maturities of long-term debt and lease obligations </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 5 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 5 </td> </tr> <tr style="mso-yfti-irow:9;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:45.0%;padding: 0in 5.4pt 0in 5.4pt;height:12.75pt"> Other long-term debt and lease obligations </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.32%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 3,593 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 3,678 </td> </tr> <tr style= "mso-yfti-irow:10;mso-yfti-lastrow:yes;height:12.75pt"> <td width="29%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:29.64%; border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> Long-term litigation liabilities </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.36%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.32%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> 61 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> <td width="15%" nowrap="nowrap" valign="bottom" style= "width:15.84%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> 58 </td> </tr><![if !supportMisalignedColumns]> <tr height="0"> <td width="111" style="border:none"></td> <td width="111" style="border:none"></td> <td width="115" style="border:none"></td> <td width="20" style="border:none"></td> <td width="115" style="border:none"></td> <td width="20" style="border:none"></td> <td width="118" style="border:none"></td> <td width="20" style="border:none"></td> <td width="118" style="border:none"></td> </tr><![endif]> </table>   The estimated fair values of insurance receivables and long-term litigation liabilities were computed by discounting the expected cash flows based on currently available information, which in many cases does not include final orders or settlement agreements.  The discount factors used in the calculations reflect the non-performance risk of the insurance providers and the company, respectively.  The estimated fair values of current and long-term debt and lease obligations were computed by multiplying price by the notional amount of the respective debt instrument.  Price is calculated using the stated terms of the respective debt instrument and yield curves commensurate with the company’s credit risk.  The carrying values of the other financial instruments approximate their fair values due to the short-term maturities of most of these assets and liabilities. <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; 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<div> <a name="_AUC82faca6f98484991beb1b07f5a5f98b3">Effective tax rate</a>   The company’s effective income tax rate was 18.6% and 18.9% in the second quarters of 2009 and 2008, respectively, and 18.7% and 19.2% in the six-month periods ended June 30, 2009 and 2008, respectively.  The decline in the effective tax rates for both the three- and six-month periods ended June 30, 2009 was the result of favorable earnings mix compared to their respective prior year periods.    Baxter expects to reduce the gross amount of its liability for uncertain tax positions within the next 12 months by approximately $330 million due to the expiration of a loss carryforward, the expiration of certain statutes of limitations related to tax benefits taken in respect of losses from restructuring certain international operations, and the settlements of certain multi-jurisdictional transfer pricing issues.  While there continues to be a reasonable possibility that the resolution of these items will be at amounts other than the amounts of the liabilities, the company also believes the reserves are adequate.  <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} /*]]>*/ </style> </div>

<div> <a name= "_AUC157887dd1cdc41e6bc30b9f0bca8c0b0"> Other intangible assets, net</a>   The following is a summary of the company’s intangible assets subject to amortization at June 30, 2009 and December 31, 2008.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.54%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="40%" nowrap="nowrap" valign="bottom" style= "width:40.12%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.74%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.3%;border:none;border-top: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.0pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.04%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Developed </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.36%; border:none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> </tr> <tr style="mso-yfti-irow:1;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.54%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="40%" nowrap="nowrap" valign="bottom" style= "width:40.12%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.74%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.3%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.04%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> technology, </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.36%; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> </td> </tr> <tr style="mso-yfti-irow:2;height:12.0pt"> <td width="44%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:44.66%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (in millions) </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.74%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.3%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.04%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> including patents </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Other </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.62%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Total </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="44%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:44.66%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> June 30, 2009 </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.74%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.3%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.62%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="44%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:44.66%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Gross other intangible assets </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.74%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.3%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $894 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $98 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.62%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $992 </td> </tr> <tr style="mso-yfti-irow:5;height:12.75pt"> <td width="44%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:44.66%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Accumulated amortization </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.74%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.3%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.04%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">       (458) </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> (54) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.62%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> (512) </td> </tr> <tr style="mso-yfti-irow:6;height:13.5pt"> <td width="44%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:44.66%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Other intangible assets, net </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.74%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.3%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:13.5pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.04%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $436 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   $44 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.62%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $480 </td> </tr> <tr style="mso-yfti-irow:7;height:5.1pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.54%;padding:0in 5.4pt 0in 5.4pt; height:5.1pt"> </td> <td width="40%" nowrap="nowrap" valign="bottom" style= "width:40.12%;padding:0in 5.4pt 0in 5.4pt; height:5.1pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.74%;padding:0in 5.4pt 0in 5.4pt; height:5.1pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.3%;padding:0in 5.4pt 0in 5.4pt; height:5.1pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;padding:0in 5.4pt 0in 5.4pt; height:5.1pt"> </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.04%;padding:0in 5.4pt 0in 5.4pt; height:5.1pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;padding:0in 5.4pt 0in 5.4pt; height:5.1pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;padding:0in 5.4pt 0in 5.4pt; height:5.1pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.62%;padding:0in 5.4pt 0in 5.4pt; height:5.1pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;padding:0in 5.4pt 0in 5.4pt; height:5.1pt"> </td> </tr> <tr style="mso-yfti-irow:8;height:12.75pt"> <td width="44%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:44.66%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> December 31, 2008 </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.74%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.3%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.62%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> </tr> <tr style="mso-yfti-irow:9;height:12.75pt"> <td width="44%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:44.66%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Gross other intangible assets </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.74%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.3%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.04%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $777 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $117 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.62%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $894 </td> </tr> <tr style="mso-yfti-irow:10;height:12.75pt"> <td width="44%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:44.66%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Accumulated amortization </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.74%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.3%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.04%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">         (444) </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">           (67) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.62%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">         (511) </td> </tr> <tr style= "mso-yfti-irow:11;mso-yfti-lastrow:yes;height:13.5pt"> <td width="44%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:44.66%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Other intangible assets, net </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.74%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.3%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:13.5pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.04%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $333 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.96%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $50 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.62%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $383 </td> </tr> </table>   The amortization expense for these intangible assets was $16 million and $14 million for the three months ended June 30, 2009 and 2008, respectively, and $28 million and $27 million for the six months ended June 30, 2009 and 2008, respectively.  The anticipated annual amortization expense for intangible assets recorded as of June 30, 2009 is $62 million in 2009, $61 million in 2010, $57 million in 2011, $53 million in 2012, $50 million in 2013 and $46 million in 2014.  The increase in gross other intangible assets primarily related to the consolidation of SIGMA.  See “Acquisitions of and investments in businesses and technologies” below for further information regarding SIGMA.  <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; 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<div> <a name= "_AUCa47eb98c181e445f8509bdd8bb28e659"> Inventories</a>   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.42%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="41%" nowrap="nowrap" valign="bottom" style= "width:41.62%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.7%;border:none;border-top: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.36%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.92%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.32%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.84%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.64%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> December 31, </td> </tr> <tr style="mso-yfti-irow:1;height:12.0pt"> <td width="46%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:46.04%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (in millions) </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.7%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.36%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.92%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.32%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.84%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.64%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> </tr> <tr style="mso-yfti-irow:2;height:12.75pt"> <td width="46%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:46.04%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Raw materials </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.7%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.36%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $622 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.32%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.64%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $600 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="46%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:46.04%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Work in process </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.7%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.36%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 795 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.32%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.64%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">           737 </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="46%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:46.04%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Finished goods </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.7%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.36%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.92%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">  1,079 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.32%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.84%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.64%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">        1,024 </td> </tr> <tr style= "mso-yfti-irow:5;mso-yfti-lastrow:yes;height:13.5pt"> <td width="46%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:46.04%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Inventories </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.7%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.36%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.92%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $2,496 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.32%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.84%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.64%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $2,361 </td> </tr> </table> <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; 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<div> <a name= "_AUCd685b2ffbb9c4432a03235a6909889dd"> 1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</a>   The unaudited interim condensed consolidated financial statements of Baxter International Inc. and its subsidiaries (the company or Baxter) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission.  Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (GAAP) have been condensed or omitted.  These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the company's 2008 Annual Report to Shareholders (2008 Annual Report).   In the opinion of management, the interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the interim periods.  All such adjustments, unless otherwise noted herein, are of a normal, recurring nature.  The results of operations for the interim period are not necessarily indicative of the results of operations to be expected for the full year.   As of the financial statements issuance date, no events or transactions have occurred subsequent to the consolidated balance sheet date of June 30, 2009 that required recognition or disclosure.  <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} /*]]>*/ </style> </div>

<div> <a name= "_AUCa43649c480434680935ddec5acfa86fc"> 2.     SUPPLEMENTAL FINANCIAL INFORMATION</a>   Net pension and other postemployment benefits expense   The following is a summary of net expense relating to the company’s pension and other postemployment benefit (OPEB) plans.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.86%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="42%" nowrap="nowrap" valign="bottom" style= "width:42.82%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.88%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="23%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:23.78%; border:none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Three months ended </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="21%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:21.8%;border: none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Six months ended </td> </tr> <tr style="mso-yfti-irow:1;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.86%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="42%" nowrap="nowrap" valign="bottom" style= "width:42.82%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.88%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="23%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:23.78%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="21%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:21.8%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> </tr> <tr style="mso-yfti-irow:2;height:12.0pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.68%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (in millions) </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.88%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.48%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.52%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.56%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.46%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.68%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Pension benefits </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.88%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.48%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.52%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.56%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.68%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Service cost </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.88%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.48%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $22 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.52%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $22 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.56%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $43 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $43 </td> </tr> <tr style="mso-yfti-irow:5;height:12.75pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.68%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Interest cost </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.88%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.48%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 55 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.52%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 51 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.56%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 109 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 102 </td> </tr> <tr style="mso-yfti-irow:6;height:12.95pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.68%; padding:0in 5.4pt 0in 5.4pt;height:12.95pt"> Expected return on plan assets </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.88%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.48%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt">        (63) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.52%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt">        (58) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.56%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt">        (125) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.46%;padding:0in 5.4pt 0in 5.4pt; height:12.95pt">  (116) </td> </tr> <tr style="mso-yfti-irow:7;height:12.75pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.68%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Amortization of net losses and other deferred amounts </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.88%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.48%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> 24 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.52%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> 20 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.56%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> 49 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.46%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> 40 </td> </tr> <tr style="mso-yfti-irow:8;height:13.5pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.68%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Net pension plan expense </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.88%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.48%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $38 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.52%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $35 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.56%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $76 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.46%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $69 </td> </tr> <tr style="mso-yfti-irow:9;height:5.25pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.86%;padding:0in 5.4pt 0in 5.4pt; height:5.25pt"> </td> <td width="42%" nowrap="nowrap" valign="bottom" style= "width:42.82%;padding:0in 5.4pt 0in 5.4pt; height:5.25pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.88%;padding:0in 5.4pt 0in 5.4pt; height:5.25pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.48%;padding:0in 5.4pt 0in 5.4pt; height:5.25pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:5.25pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.52%;padding:0in 5.4pt 0in 5.4pt; height:5.25pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:5.25pt"> </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.56%;padding:0in 5.4pt 0in 5.4pt; height:5.25pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:5.25pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.46%;padding:0in 5.4pt 0in 5.4pt; height:5.25pt"> </td> </tr> <tr style="mso-yfti-irow:10;height:12.75pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.68%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> OPEB </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.88%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.48%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.52%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.56%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> </tr> <tr style="mso-yfti-irow:11;height:12.75pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.68%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Service cost </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.88%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.48%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $1 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.52%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $1 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.56%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $2 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $2 </td> </tr> <tr style="mso-yfti-irow:12;height:12.75pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.68%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Interest cost </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.88%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.48%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 8 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.52%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 7 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.56%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 16 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.46%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 15 </td> </tr> <tr style="mso-yfti-irow:13;height:12.75pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.68%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Amortization of net losses and other deferred amounts </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.88%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.48%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> - </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.52%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> - </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.56%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> (1) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.46%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> - </td> </tr> <tr style= "mso-yfti-irow:14;mso-yfti-lastrow:yes;height:13.5pt"> <td width="47%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:47.68%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Net OPEB plan expense </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.88%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.48%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $9 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.52%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $8 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.86%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.56%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $17 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.46%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $17 </td> </tr> </table> <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} /*]]>*/ </style> </div>

<div> <a name= "_AUCeaf34a12b3584576babdc7e0bd4ef4fc"> Property, plant and equipment, net</a>   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.42%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="41%" nowrap="nowrap" valign="bottom" style= "width:41.62%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.7%;border:none;border-top: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.36%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.92%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.32%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.84%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.64%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> December 31, </td> </tr> <tr style="mso-yfti-irow:1;height:12.0pt"> <td width="46%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:46.04%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (in millions) </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.7%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.36%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.92%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.32%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.84%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.64%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> </tr> <tr style="mso-yfti-irow:2;height:12.75pt"> <td width="46%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:46.04%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Property, plant and equipment, at cost </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.7%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.36%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.92%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $9,410 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.32%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.84%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.64%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $9,021 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="46%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:46.04%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Accumulated depreciation and amortization </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.7%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.36%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.92%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">  (4,653) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.32%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.84%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.64%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">      (4,412) </td> </tr> <tr style= "mso-yfti-irow:4;mso-yfti-lastrow:yes;height:13.5pt"> <td width="46%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:46.04%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Property, plant and equipment, net (PP&E) </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.7%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.36%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.92%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="10%" nowrap="nowrap" valign="bottom" style= "width:10.34%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $4,757 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="6%" nowrap="nowrap" valign="bottom" style= "width:6.32%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.84%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.64%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $4,609 </td> </tr> </table> <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; 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<div> <a name="_AUCb505711a479848d6ad9d87c17a15a7d9">3.     RESTRUCTURING AND OTHER CHARGES</a>   Baxter has made and continues to make significant investments in assets, including inventory and PP&E, which relate to potential new products or modifications to existing products.  The company’s ability to realize value from these investments is contingent on, among other things, regulatory approval and market acceptance of these new products.   The company may not be able to realize the expected returns from these investments, potentially resulting in asset impairments in the future.   Restructuring charges   The company recorded restructuring charges of $70 million and $543 million in 2007 and 2004, respectively.  The 2007 charge was principally associated with the consolidation of certain commercial and manufacturing operations outside of the United States.  The 2004 charge was principally associated with management’s decision to implement actions to reduce the company’s overall cost structure and to drive sustainable improvements in financial performance.  Refer to Note 5 to the company’s consolidated financial statements in the 2008 Annual Report for additional information about these charges.   Included in the 2007 and 2004 restructuring charges were $53 million and $347 million of cash costs, respectively.  The following table summarizes the current year cash activity and outstanding reserves related to the company’s 2007 and 2004 restructuring charges.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.66%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="41%" nowrap="nowrap" valign="bottom" style= "width:41.18%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.88%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.52%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.3%;border:none;border-top: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> Employee- </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.76%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Contractual </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.52%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> </tr> <tr style="mso-yfti-irow:1;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.66%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="41%" nowrap="nowrap" valign="bottom" style= "width:41.18%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.88%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.52%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.3%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> related </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.76%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> and other </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.52%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> </tr> <tr style="mso-yfti-irow:2;height:12.0pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.84%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (in millions) </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.88%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.52%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.3%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> costs </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.76%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> costs </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.52%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Total </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.84%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Reserves at December 31, 2008 </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.88%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.52%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.3%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $25 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.76%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $14 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.52%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $39 </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.84%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Utilization </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.88%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.52%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.3%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> (19) </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.76%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> (3) </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.52%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> (22) </td> </tr> <tr style= "mso-yfti-irow:5;mso-yfti-lastrow:yes;height:13.5pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.84%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Reserves at June 30, 2009 </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.88%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.52%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.3%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $6 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.76%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $11 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.06%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.52%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $17 </td> </tr> </table>   The 2007 and 2004 reserves are expected to be substantially utilized by the end of 2009.  The company believes that the reserves are adequate.  However, adjustments may be recorded in the future as the programs are completed.   Transfusion Therapies During 2007, the company divested substantially all of the assets and liabilities of its Transfusion Therapies (TT) business.  In connection with the TT divestiture, the company recorded a $35 million charge principally associated with severance and other employee-related costs.  Reserve utilization through June 30, 2009 was $18 million.  The reserve is expected to be substantially utilized by the end of 2009.  The company believes that the reserve is adequate; however, adjustments may be recorded in the future as the transition is completed.  Refer to Note 3 to the company’s consolidated financial statements in the 2008 Annual Report for further information regarding the TT divestiture. <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} /*]]>*/ </style> </div>

<div> <a name= "_AUCab593af7d0734a6cbd75211667f2fd63"> Goodwill</a>   The following is a summary of the activity in goodwill by business segment.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.5%;border:none;border-top: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.0pt">   </td> <td width="40%" nowrap="nowrap" valign="bottom" style= "width:40.28%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.68%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.94%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.9%;border:none;border-top: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.0pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Medication </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.9%;border:none;border-top: solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt;padding:0in 5.4pt 0in 5.4pt; height:12.0pt">   </td> <td width="21%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:21.92%; border:none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> </tr> <tr style="mso-yfti-irow:1;height:12.0pt"> <td width="44%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:44.78%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (in millions) </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.94%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> BioScience </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.9%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Delivery </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.9%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.12%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Renal </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.02%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Total </td> </tr> <tr style="mso-yfti-irow:2;height:12.75pt"> <td width="44%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:44.78%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Balance as of December 31, 2008 </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $585 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.9%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $917 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.9%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.12%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $152 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.02%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $1,654 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="44%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:44.78%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Goodwill acquired during the period </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> - </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.9%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 87 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.9%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.12%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> - </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.02%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 87 </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="44%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:44.78%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Cumulative translation adjustment </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.94%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> 2 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.9%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> 11 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.9%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.12%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> 2 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.02%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> 15 </td> </tr> <tr style= "mso-yfti-irow:5;mso-yfti-lastrow:yes;height:13.5pt"> <td width="44%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:44.78%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Balance as of June 30, 2009 </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.68%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.94%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $587 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.9%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="9%" nowrap="nowrap" valign="bottom" style= "width:9.86%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $1,015 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.9%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.12%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $154 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.78%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="11%" nowrap="nowrap" valign="bottom" style= "width:11.02%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $1,756 </td> </tr> </table>   Goodwill acquired during the period related to the consolidation of SIGMA within the Medication Delivery segment.  See “Acquisitions of and investments in businesses and technologies” below for further information regarding SIGMA.  As of June 30, 2009, the company has recorded no goodwill impairment losses since its adoption of SFAS No. 142, “Goodwill and Other Intangible Assets.” <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; 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<div> <a name= "_AUC62c950dac6344da9b1933b2e8614eb6d"> Adoption of new accounting standards</a>   Refer to Note 4 for disclosures related to the company’s adoption of Statement of Financial Accounting Standards (SFAS) No. 161, “Disclosure about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” and Financial Accounting Standards Board (FASB) Staff Position (FSP) FAS No. 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments.”  Refer to Note 2 for disclosures related to the company’s adoption of Emerging Issues Task Force (EITF) Issue No. 07-1, “Accounting for Collaborative Arrangements” (EITF No. 07-1) and the company’s adoption of FSP FAS No. 140-4 and FIN 46(R)-8, “Disclosure by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities” as it relates to the April 2009 arrangement with SIGMA International General Medical Apparatus, LLC (SIGMA).   <h5 style="margin-left:0in"> SFAS No. 141-R </h5> On January 1, 2009, the company adopted SFAS No. 141 (revised 2007), “Business Combinations” (SFAS No. 141-R).  The new standard changes the accounting for business combinations in a number of significant respects.  The key changes include the expansion of transactions that will qualify as business combinations, the capitalization of in-process research and development (IPR&D) as an indefinite-lived asset, the recognition of certain acquired contingent assets and liabilities at fair value, the expensing of acquisition costs, the expensing of costs associated with restructuring the acquired company, the recognition of contingent consideration at fair value on the acquisition date, and the recognition of post-acquisition date changes in deferred tax asset valuation allowances and acquired income tax uncertainties as income tax expense or benefit.  The new standard was applicable for acquisitions made by the company on or after January 1, 2009, including the April 2009 arrangement with SIGMA.  Refer to Note 2 for further information.   SFAS No. 160 On January 1, 2009, the company adopted SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51” (SFAS No. 160).  The new standard changed the accounting and reporting of noncontrolling interests, which have historically been referred to as minority interests.  SFAS No. 160 requires that noncontrolling interests be presented in the consolidated balance sheets within equity, but separate from Baxter shareholders’ equity, and that the amount of consolidated net income attributable to Baxter and to the noncontrolling interests be clearly identified and presented in the consolidated statements of income.  Any losses in excess of the noncontrolling interest’s equity interest continue to be allocated to the noncontrolling interest.  Purchases or sales of equity interests that do not result in a change of control are accounted for as equity transactions.  Upon a loss of control the interest sold, as well as any interest retained, is measured at fair value, with any gain or loss recognized in earnings.  In partial acquisitions, when control is obtained, 100% of the assets and liabilities, including goodwill, are recognized at fair value as if the entire target company had been acquired.  The new standard has been applied prospectively as of January 1, 2009, except for the presentation and disclosure requirements, which have been applied retrospectively for prior periods presented.  Prior to the adoption of SFAS No. 160, the noncontrolling interests’ share of net income was included in other (income) expense, net in the consolidated statement of income and the noncontrolling interests’ equity was included in other long-term liabilities in the consolidated balance sheet.   Issued but not yet effective accounting standards   FSP FAS No. 132(R)-1 In December 2008, the FASB issued FSP FAS No. 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets”.  This FSP expands the disclosure requirements relating to pension and other postretirement benefits to require enhanced disclosures about how investment allocation decisions are made and the investment policies and strategies that support those decisions, major categories of plan assets, the input and valuation techniques used in measuring plan assets at fair value, and significant concentrations of credit risk within plan assets.  The company will include the disclosures required by this standard beginning with its 2009 year-end consolidated financial statements.   SFAS No. 166 In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets - an amendment of FASB Statement No. 140” (SFAS No. 166).  The standard eliminates the concept of a qualifying special-purpose entity and clarifies existing GAAP as it relates to determining whether a transferor has surrendered control over transferred financial assets.  SFAS No. 166 limits the circumstances in which a financial asset, or portion of a financial asset, should be derecognized when the transferor has not transferred the entire original financial asset to an entity that is not consolidated with the transferor in the financial statements presented and/or when the transferor has continuing involvement with the transferred financial asset.  The standard also requires enhanced disclosures about transfers of financial assets and a transferor’s continuing involvement with transferred financial assets.  SFAS No. 166 is effective for fiscal years, and interim periods within those fiscal years, beginning after November 15, 2009, with early adoption prohibited.  The new standard will be applied prospectively, except for the disclosure requirements, which will be applied retrospectively for all periods presented.  The company is in the process of analyzing the impact of this standard, which will be adopted by the company at the beginning of 2010.   SFAS No. 167 In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (SFAS No. 167), which changes the consolidation model for variable interest entities (VIEs).  The standard requires an enterprise to qualitatively assess the determination of the primary beneficiary of a VIE as the enterprise that has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and has the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE.  SFAS No. 167 requires ongoing reassessments of whether an enterprise is the primary beneficiary of a VIE.  SFAS No. 167 expands the disclosure requirements for enterprises with a variable interest in a VIE.  SFAS No. 167 is effective for fiscal years, and interim periods within those fiscal years, beginning after November 15, 2009, with early adoption prohibited.  The company is in the process of analyzing the impact of this standard, which will be adopted by the company at the beginning of 2010.   Reclassifications   Certain reclassifications have been made to conform the prior periods consolidated financial statements and notes to the current period presentation, including reclassifications related to the company’s adoption of SFAS No. 160. <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} /*]]>*/ </style> </div>

<div> <a name="_AUCf2367c94043643aba7e01bbb285ca4f6">Stock repurchases</a>   As authorized by the board of directors, from time to time the company repurchases its stock depending upon the company’s cash flows, net debt level and current market conditions.  During the three- and six-month periods ended June 30, 2009, the company repurchased 6.1 million shares and 16.2 million shares for $300 million and $866 million, respectively, under the board of directors’ March 2008 $2.0 billion share repurchase authorization.  At June 30, 2009, $300 million remained available under this authorization.  <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} /*]]>*/ </style> </div>

<div> <a name="_AUCf7f7bece2ca644c4bef678d983b17cca">7.     SEGMENT INFORMATION</a>   Baxter operates in three segments, each of which is a strategic business that is managed separately because each business develops, manufactures and markets distinct products and services.  The segments and a description of their products and services are as follows:   The BioScience business manufactures recombinant and plasma-based proteins to treat hemophilia and other bleeding disorders; plasma-based therapies to treat immune deficiencies, alpha 1-antitrypsin deficiency, burns and shock, and other chronic and acute blood-related conditions; products for regenerative medicine, such as biosurgery products and technologies used in adult stem-cell therapies; and vaccines.   The Medication Delivery business manufactures intravenous (IV) solutions and administration sets, premixed drugs and drug-reconstitution systems, pre-filled vials and syringes for injectable drugs, IV nutrition products, infusion pumps, and inhalation anesthetics, as well as products and services related to pharmacy compounding and pharmaceutical partnering, drug formulation and packaging technologies.     The Renal business provides products to treat end-stage renal disease, or irreversible kidney failure.  The business manufactures solutions and other products for peritoneal dialysis, a home-based therapy, and also distributes products for hemodialysis, which is generally conducted in a hospital or clinic.    The company uses more than one measurement and multiple views of data to measure segment performance and to allocate resources to the segments.  However, the dominant measurements are consistent with the company’s consolidated financial statements and, accordingly, are reported on the same basis herein.  The company evaluates the performance of its segments and allocates resources to them primarily based on pre-tax income along with cash flows and overall economic returns.  Intersegment sales are generally accounted for at amounts comparable to sales to unaffiliated customers and are eliminated in consolidation.   Certain items are maintained at the corporate level (corporate) and are not allocated to the segments.  They primarily include most of the company’s debt and cash and equivalents and related net interest expense, certain foreign exchange fluctuations (principally relating to intercompany receivables, payables and loans denominated in a foreign currency) and the majority of the foreign currency and interest rate hedging activities, corporate headquarters costs, stock compensation expense, certain non-strategic investments and related income and expense, certain employee benefit plan costs, certain nonrecurring gains and losses, deferred income taxes, certain litigation liabilities and related insurance receivables, and the revenues and costs related to the manufacturing, distribution and other transition agreements with Fenwal Inc. (Fenwal) in connection with the divestiture of the TT business.   Included in the Medication Delivery segment’s pre-tax income in the first half of 2008 were first quarter charges of $53 million related to COLLEAGUE infusion pumps and $19 million related to the company’s recall of its heparin sodium injection products in the United States.  Refer to Note 3 for further information on these charges.    Financial information for the company’s segments for the three and six months ended June 30 is as follows.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.62%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="40%" nowrap="nowrap" valign="bottom" style= "width:40.78%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.38%; border:none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Three months ended </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.38%; border:none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Six months ended </td> </tr> <tr style="mso-yfti-irow:1;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.62%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="40%" nowrap="nowrap" valign="bottom" style= "width:40.78%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.38%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.38%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> </tr> <tr style="mso-yfti-irow:2;height:12.0pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.4%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (in millions) </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.4%;padding: 0in 5.4pt 0in 5.4pt;height:12.75pt"> Net sales </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.4%;padding: 0in 5.4pt 0in 5.4pt;height:12.75pt"> BioScience </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $1,418 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $1,385 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $2,670 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $2,595 </td> </tr> <tr style="mso-yfti-irow:5;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.4%;padding: 0in 5.4pt 0in 5.4pt;height:12.75pt"> Medication Delivery </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 1,134 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">        1,164 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 2,169 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">        2,229 </td> </tr> <tr style="mso-yfti-irow:6;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.4%;padding: 0in 5.4pt 0in 5.4pt;height:12.75pt"> Renal </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 550 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">           598 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 1,065 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">        1,156 </td> </tr> <tr style="mso-yfti-irow:7;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.4%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Transition services to Fenwal </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">  21 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">             42 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">  43 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">             86 </td> </tr> <tr style="mso-yfti-irow:8;height:13.5pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.4%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Total </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $3,123 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $3,189 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $5,947 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $6,066 </td> </tr> <tr style="mso-yfti-irow:9;height:6.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.62%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="40%" nowrap="nowrap" valign="bottom" style= "width:40.78%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:6.0pt"> </td> </tr> <tr style="mso-yfti-irow:10;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.4%;padding: 0in 5.4pt 0in 5.4pt;height:12.75pt"> Pre-tax income </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> </tr> <tr style="mso-yfti-irow:11;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.4%;padding: 0in 5.4pt 0in 5.4pt;height:12.75pt"> BioScience </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $565 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $565 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $1,074 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $1,065 </td> </tr> <tr style="mso-yfti-irow:12;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.4%;padding: 0in 5.4pt 0in 5.4pt;height:12.75pt"> Medication Delivery </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 207 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 209 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 375 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 303 </td> </tr> <tr style="mso-yfti-irow:13;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.4%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Renal </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">  77 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">  86 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">  127 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">  164 </td> </tr> <tr style= "mso-yfti-irow:14;mso-yfti-lastrow:yes;height:13.5pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.4%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Total pre-tax income from segments </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $849 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $860 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.78%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $1,576 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.94%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $1,532 </td> </tr> </table>   Transition services to Fenwal represent revenues associated with manufacturing, distribution and other services provided by the company to Fenwal subsequent to the divestiture of the TT business in 2007.  Refer to Note 3 to the company’s consolidated financial statements in the 2008 Annual Report for further information regarding the TT divestiture.   The following is a reconciliation of segment pre-tax income to income before income taxes per the consolidated income statements.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.75pt 0in 5.75pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.82%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt">   </td> <td width="39%" nowrap="nowrap" valign="bottom" style= "width:39.96%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.02%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt">   </td> <td width="23%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:23.66%; border:none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt"> Three months ended </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.22%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt">   </td> <td width="24%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:24.32%; border:none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt"> Six months ended </td> </tr> <tr style="mso-yfti-irow:1;height:12.0pt"> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.82%;padding:0in 5.75pt 0in 5.75pt; height:12.0pt"> </td> <td width="39%" nowrap="nowrap" valign="bottom" style= "width:39.96%;padding:0in 5.75pt 0in 5.75pt; height:12.0pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.02%;padding:0in 5.75pt 0in 5.75pt; height:12.0pt"> </td> <td width="23%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:23.66%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt"> June 30, </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.22%;padding:0in 5.75pt 0in 5.75pt; height:12.0pt"> </td> <td width="24%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:24.32%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt"> June 30, </td> </tr> <tr style="mso-yfti-irow:2;height:12.0pt"> <td width="43%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:43.78%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt"> (in millions) </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.02%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.6%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt">   </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt"> 2008 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.22%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.26%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.0pt"> 2008 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="43%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:43.78%; padding:0in 5.75pt 0in 5.75pt;height:12.75pt"> Total pre-tax income from segments </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.02%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.6%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> $849 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.14%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> $860 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.22%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.14%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> $1,576 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.26%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> $1,532 </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="43%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:43.78%; padding:0in 5.75pt 0in 5.75pt;height:12.75pt"> Unallocated amounts </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.02%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.6%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.14%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.22%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.14%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.26%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> </tr> <tr style="mso-yfti-irow:5;height:12.75pt"> <td width="43%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:43.78%; padding:0in 5.75pt 0in 5.75pt;height:12.75pt"> Net interest expense </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.02%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.6%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> (24) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.14%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt">           (25) </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.22%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.14%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> (50) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.26%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt">           (42) </td> </tr> <tr style="mso-yfti-irow:6;height:23.25pt"> <td width="43%" colspan="2" style= "width:43.78%;padding:0in 5.75pt 0in 5.75pt; height:23.25pt"> Certain foreign currency fluctuations and hedging activities </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.02%;padding:0in 5.75pt 0in 5.75pt; height:23.25pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.6%;padding:0in 5.75pt 0in 5.75pt; height:23.25pt"> 34 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;padding:0in 5.75pt 0in 5.75pt; height:23.25pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.14%;padding:0in 5.75pt 0in 5.75pt; height:23.25pt">               9 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.22%;padding:0in 5.75pt 0in 5.75pt; height:23.25pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.14%;padding:0in 5.75pt 0in 5.75pt; height:23.25pt"> 76 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;padding:0in 5.75pt 0in 5.75pt; height:23.25pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.26%;padding:0in 5.75pt 0in 5.75pt; height:23.25pt">             10 </td> </tr> <tr style="mso-yfti-irow:7;height:12.75pt"> <td width="43%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:43.78%; padding:0in 5.75pt 0in 5.75pt;height:12.75pt"> Stock compensation </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.02%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.6%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> (36) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.14%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt">           (35) </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.22%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.14%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> (74) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt"> </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.26%;padding:0in 5.75pt 0in 5.75pt; height:12.75pt">           (73) </td> </tr> <tr style="mso-yfti-irow:8;height:12.75pt"> <td width="43%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:43.78%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.75pt"> Other corporate items </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.02%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.6%;border:none;border-bottom: solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.75pt">  (99) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.75pt">   </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.75pt">         (133) </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.22%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.75pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.14%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.75pt">  (167) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.75pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.26%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:12.75pt">         (214) </td> </tr> <tr style= "mso-yfti-irow:9;mso-yfti-lastrow:yes;height:13.5pt"> <td width="43%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:43.78%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.75pt 0in 5.75pt;height:13.5pt"> Income before income taxes </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.02%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.75pt 0in 5.75pt; height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.6%;border:none;border-bottom: solid windowtext 1.0pt;padding:0in 5.75pt 0in 5.75pt;height:13.5pt"> $724 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.75pt 0in 5.75pt; height:13.5pt">   </td> <td width="12%" nowrap="nowrap" valign="bottom" style= "width:12.14%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.75pt 0in 5.75pt; height:13.5pt"> $676 </td> <td width="3%" nowrap="nowrap" valign="bottom" style= "width:3.22%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.75pt 0in 5.75pt; height:13.5pt">   </td> <td width="8%" nowrap="nowrap" valign="bottom" style= "width:8.14%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.75pt 0in 5.75pt; height:13.5pt"> $1,361 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.92%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.75pt 0in 5.75pt; height:13.5pt">   </td> <td width="13%" nowrap="nowrap" valign="bottom" style= "width:13.26%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.75pt 0in 5.75pt; height:13.5pt"> $1,213 </td> </tr> </table> <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} /*]]>*/ </style> </div>

<div> <a name="_AUCb8a850e9c79e43f49c6d3735be502c35">Securitization arrangements</a>   For the three months ended June 30, 2009, the company’s securitization arrangements did not result in any net cash flows.  The company’s securitization arrangements resulted in net cash inflows of $6 million for the three months ended June 30, 2008, and net cash outflows of $19 million and $10 million for the six months ended June 30, 2009 and 2008, respectively.  A summary of the activity is as follows.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="100%" style= "width:100.0%;border-collapse:collapse;mso-yfti-tbllook:1184;mso-padding-alt: 0in 5.4pt 0in 5.4pt"> <tr style= "mso-yfti-irow:0;mso-yfti-firstrow:yes;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.62%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="40%" nowrap="nowrap" valign="bottom" style= "width:40.76%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.4%;border: none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Three months ended </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;border:none; border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.4%;border: none;border-top:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> Six months ended </td> </tr> <tr style="mso-yfti-irow:1;height:12.0pt"> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.62%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="40%" nowrap="nowrap" valign="bottom" style= "width:40.76%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.4%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;padding:0in 5.4pt 0in 5.4pt; height:12.0pt"> </td> <td width="22%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:22.4%;border: none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> June 30, </td> </tr> <tr style="mso-yfti-irow:2;height:12.0pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.38%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> (in millions) </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.62%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="14%" nowrap="nowrap" valign="bottom" style= "width:14.1%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.62%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2009 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt">   </td> <td width="14%" nowrap="nowrap" valign="bottom" style= "width:14.1%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt"> 2008 </td> </tr> <tr style="mso-yfti-irow:3;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.38%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Sold receivables at beginning of period </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.62%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $127 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="14%" nowrap="nowrap" valign="bottom" style= "width:14.1%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $129 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.62%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $154 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="14%" nowrap="nowrap" valign="bottom" style= "width:14.1%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> $129 </td> </tr> <tr style="mso-yfti-irow:4;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.38%; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Proceeds from sales of receivables </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.62%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 129 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="14%" nowrap="nowrap" valign="bottom" style= "width:14.1%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">           116 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.62%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> 253 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="14%" nowrap="nowrap" valign="bottom" style= "width:14.1%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">           220 </td> </tr> <tr style="mso-yfti-irow:5;height:12.75pt"> <td width="51%" nowrap="nowrap" colspan="3" valign="bottom" style= "width:51.2%;padding: 0in 5.4pt 0in 5.4pt;height:12.75pt"> Cash collections (remitted to the owners of the receivables) </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.62%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> (129) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="14%" nowrap="nowrap" valign="bottom" style= "width:14.1%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">         (110) </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.62%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> (272) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt"> </td> <td width="14%" nowrap="nowrap" valign="bottom" style= "width:14.1%;padding:0in 5.4pt 0in 5.4pt; height:12.75pt">         (230) </td> </tr> <tr style="mso-yfti-irow:6;height:12.75pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.38%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt"> Effect of currency exchange rate changes </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.62%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">  1 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="14%" nowrap="nowrap" valign="bottom" style= "width:14.1%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">           (11) </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.62%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">  (7) </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">   </td> <td width="14%" nowrap="nowrap" valign="bottom" style= "width:14.1%;border:none; border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:12.75pt">               5 </td> </tr> <tr style= "mso-yfti-irow:7;mso-yfti-lastrow:yes;height:13.5pt"> <td width="45%" nowrap="nowrap" colspan="2" valign="bottom" style= "width:45.38%; border:none;border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> Sold receivables at end of period </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.82%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.62%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $128 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="14%" nowrap="nowrap" valign="bottom" style= "width:14.1%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $124 </td> <td width="4%" nowrap="nowrap" valign="bottom" style= "width:4.02%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="5%" nowrap="nowrap" valign="bottom" style= "width:5.62%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $128 </td> <td width="2%" nowrap="nowrap" valign="bottom" style= "width:2.68%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt">   </td> <td width="14%" nowrap="nowrap" valign="bottom" style= "width:14.1%;border:none; border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt"> $124 </td> </tr> </table> <style> /*<![CDATA[*/  /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} /*]]>*/ </style> </div>

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